There are perhaps four distinct categories of wind power which should be discussed. These are
1. small, non-grid connected
2. small, grid connected
3. large, non-grid connected
4. large, grid connected

By small, we mean a size appropriate for an individual to own, up to a few tens of kilowatts. Large refers to utility scale.

Small, Non-Grid Connected
If one wants electricity in a location not serviced by a utility, one of the options is a wind turbine, with batteries to level out supply and demand. This might be a vacation home, a remote antenna and transmitter site, or a Third-World village.

The costs will be high, on the order of $0.50/kWh, but if the total energy usage is small, this might be acceptable. The alternatives, photovoltaics, microhydro, and diesel generators, are not cheap either, so a careful economic study needs to be done for each situation.

Small, Grid Connected
The small, grid connected turbine is usually not economically feasible. The cost of wind-generated electricity is less because the utility is used for storage rather than a battery bank, but is still not competitive.

In order for the small, grid connected turbine to have any hope of financial breakeven, the turbine owner needs to get something close to the retail price for the wind-generated electricity. One way this is done is for the owner to have an arrangement with the utility called net metering.

With this system, the meter runs backward when the turbine is generating more than the owner is consuming at the moment. The owner pays a monthly charge for the wires to his home, but it is conceivable that the utility will sometimes write a check to the owner at the end of the month, rather than the other way around.

The utilities do not like this arrangement. They want to buy at wholesale and sell at retail. They feel it is unfair to be used as a storage system without remuneration.

For most of the twentieth century, utilities simply refused to connect the grid to wind turbines. The utility had the right to generate electricity in a given service territory, and they would not tolerate competition. Then a law was passed that utilities had to hook up wind turbines and pay them the avoided cost for energy.

Unless the state mandated net metering, the utility typically required the installation of a second meter, one measuring energy consumption by the home and the other energy production by the turbine. The owner would pay the regular retail rate, and the utility would pay their estimate of avoided cost, usually the fuel cost of some base load generator. The owner might pay $0.08 to $0.15 per kWh, and receive $0.02 per kWh for the wind-generated electricity.

This was far from enough to economically justify a wind turbine, and had the effect of killing the small wind turbine business.

Large, Non-Grid Connected
These machines would be installed on islands or in native villages in the far north where it is virtually impossible to connect to a large grid. Such places are typically supplied by diesel generators, and have a substantial cost just for the imported fuel.

One or more wind turbines would be installed in parallel with the diesel generators, and act as fuel savers when the wind was blowing. This concept has been studied carefully and appears to be quite feasible technically.

One would expect the market to develop after a few turbines have been shown to work for an extended period in hostile environments. It would be helpful if the diesel maintenance companies would also carry a line of wind turbines so the people in remote locations would not need to teach another group of maintenance people about the realities of life at places far away from the nearest hardware store.

Large, Grid Connected
We might ask if the utilities should be forced to buy wind-generated electricity from these small machines at a premium price which reflects their environmental value. Many have argued this over the years.

A better question might be whether the small or the large turbines will result in a lower net cost to society.

Given that we want the environmental benefits of wind generation, should we get the electricity from the wind with many thousands of individually owned small turbines, or should we use a much smaller number of utility-scale machines?

If we could make the argument that a dollar spent on wind turbines is a dollar not spent on hospitals, schools, and the like, then it follows that wind turbines should be as efficient as possible. Economies of scale and costs of operation and maintenance are such that the small, grid connected turbine will always need to receive substantially more per kilowatt hour than the utility-scale turbines in order to break even.

There is obviously a niche market for turbines that are not connected to the grid, but small, grid connected turbines will probably not develop a thriving market. Most of the action will be from the utility-scale machines.

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